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WHO GETS TOBACCO FUNDS?

Victims may divide millions, but there are no guarantees.

In 2006, when the Florida Supreme Court struck down a $145-billion jury award against Big Tobacco, it looked as if sick smokers and their families could end up with nothing.

But that may not be the case.

The tobacco companies put $710-million in a little-known escrow account for up to 700,000 Floridians represented in the class-action lawsuit. Pledging that money allowed the cigarettemakers to appeal the biggest civil damage award in U.S. history without having to post a crushing appeal bond.

Now Floridians are beginning to seek compensation from the escrow fund.

Later this year, a court in Miami will weigh who besides tobacco victims should get a piece of that money.

The husband and wife lawyers who filed the original case on behalf of smokers?

The tobacco companies?

Both?

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Normally, a defendant in a civil case would have to post a bond equal to the amount of the award in order to pursue an appeal.

In the Big Tobacco case, posting a $145-billion bond would have bankrupted the defendants.

The Legislature capped the bond each cigarettemaker would have to post at $100-million.

That cleared the way for an appeal. To avoid a challenge to the legislative cap, the tobacco companies made an agreement with the smokers' attorneys, Stanley and Susan Rosenblatt.

Three tobacco companies, Phillip Morris, Lorillard and Liggett, put $710-million in an escrow account and promised to give the money to the plaintiffs whether they won or lost on appeal.

In exchange, the Rosenblatts agreed to allow the tobacco companies to appeal and not challenge the constitutionality of the law that capped the bond.

Now, Franklin Burr of Dunedin is trying to claim some of the money on behalf of his late wife.

Bernadeen Burr died in 1990, the victim of a paralyzing cancer brought on by smoking at least two packs of cigarettes a day. At 68, she felt pain in her leg. Cancer had spread through her body. She lived six months, the last four unable to move or swallow.

Burr has filed a lawsuit in Pinellas-Pasco Circuit Court against the Bank of New York, the administrator of the escrow account, asking for Mrs. Burr's share of the fund.

"When the money is owed and it's being held by somebody else, you should be able to get it," said Burr, 93, a retired businessman from Chicago who moved to Dunedin four decades ago.

The money is up for grabs by potentially thousands of Floridians who can prove they became sick from smoking before Nov. 21, 1996.

Miami Circuit Judge David C. Miller has set March 31 as the deadline to hear from lawyers, potential claimants and anyone else with interest in the money. He also scheduled an April 15 hearing as a starting point to determine who will get the money and to establish a mechanism for disbursing it.

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Besides striking down the judgment in 2006, the Supreme Court also decertified the class of plaintiffs, those 700,000 Florida smokers and their relatives, represented in the lawsuit.

But it gave members of the class until Jan. 11 to file individual lawsuits against the tobacco companies.

Dozens of personal injury lawyers around the state focused on filing up to 10,000 new individual lawsuits to meet that deadline. Less publicity went to the issue of claiming the $710-million.

"We didn't want to confuse people, although anybody that contacted us, we always told them ... they potentially had two claims," St. Petersburg lawyer Howard Acosta said.

And what about the tobacco companies? Would they head back to court to try to keep the $710-million?

It's possible, say experts.

"Based on the industry's history, they do love to challenge," said Edward L. Sweda, senior attorney with the Tobacco Products Liability Project at Northeastern University School of Law in Boston.

The tobacco companies that contributed to the escrow fund did not return phone calls seeking comments or declined to comment on the record.

If the companies try to keep the money, some observers say, they might argue that the class was decertified by the state Supreme Court and does not legally exist anymore.

The 29-page escrow stipulation signed by the tobacco companies and the Rosenblatts in 2001 doesn't address whether the plaintiffs would get the money if the class was decertified in future court proceedings.

Besides the three people named in the original lawsuit, there was never an actual list of class members. But some people, like Franklin Burr, provided their information to the Rosenblatts.

Scott Schlesinger, a Fort Lauderdale lawyer who has filed some of the new damage suits, pointed out that the tobacco companies now face potentially millions more in judgments.

Given that some of the claimants may be the same, Schlesinger said, the companies may want to use the escrow money to pay future judgments.

"There's no road map right now," Schlesinger said. "This is all going to be judicial determination."

- - -

The Rosenblatts took the case on contingency and have never been paid for their 14 years of work. But Judge Miller has asked them to apply for attorney fees out of the escrow. It's unknown how much money the Rosenblatts will seek. Stanley Rosenblatt did not return a call seeking comments.

Some tobacco litigation experts say the Rosenblatts deserve a generous sum, given their work.

Burr plans to attend the April 15 court hearing in Miami. There is a lot at stake, he said, and time is running out.

"So many in the class have died already because they were suffering from cancer," he said. "We don't know how may people are left."

Jose Cardenas can be reached at jcardenas@sptimes.com or (727) 445-4224.

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